Worries lead to tight wallets
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Concerns about the yuan's rise, a sluggish stock market and a slower recovery of the global economy saw Shanghai consumers tighten their wallets in the second quarter of this year, according to a survey Tuesday.
The Shanghai Consumer Confidence Index hit 105.2 points between April and June, a drop of 3.9 points from the previous quarter and 6 points from a year earlier, according to the quarterly survey by the Shanghai University of Finance and Economics.
An index reading above 100 points indicates consumers are positive about the economy while a reading below that implies the opposite.
"Consumers lost confidence on concerns of a rising yuan, decreasing exports, tightened monetary policies, inflation and a declining stock market. The European debt crisis also dampened the recovery of the world economy," said Xu Guoxiang, the research program leader and director of the university's Applied Statistics Research Center.
"But the index reading was still above 100 points in the second quarter, indicating that consumers were cautious but optimistic about the economic outlook," Xu said.
About 75.5 percent of respondents expected consumer prices to increase in the next six months, compared with 71.2 percent in the first quarter, while 5.1 percent of respondents expected prices to decrease, the survey showed.
About 18.3 percent of respondents said it's a good time to buy homes in the next six months while only 6.7 percent of them chose to buy homes in the second quarter after the government unveiled several policies to cool the overheated real estate market.
"It's still hard for ordinary consumers to bear the high housing prices even though the government has acted to control the increase," Xu said.
He added the government "should encourage more budget homes and low-rent houses to help low- and medium-income earners in Shanghai."
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